SwitzerlandIndividual - Taxes on personal income

All tax-resident individuals are taxed on their worldwide income and wealth. Non tax-resident individuals are only taxed on Swiss sources of income and wealth.

Income taxes are levied at three different levels: at the federal level (which is the same all over Switzerland), at the cantonal level (which is the same within a certain canton and is based on the canton's own tax law and tax rates), and at the municipal level (municipalities follow the cantonal tax law, but are entitled to set their own communal tax rate within certain parameters). Income tax rates are progressive at the federal level and in most of the cantons. Some cantons have recently introduced flat rate taxation.

All income is taxed on the basis of the same tax return with generally the same tax rate (i.e. all income sources are added together), and from such total income all applicable deductions are subtracted. This results in an applicable tax rate that is levied on all taxable income. Based on applicable double taxation treaties (DTTs), the actual taxable income in Switzerland may differ from the tax rate determining income. Furthermore, dividend income from substantial participations may be taxed at a lower tax rate based on domestic federal and cantonal law.

Personal income tax rates

Direct federal tax on income (for 2018)

I - Single taxpayers

Taxable income (CHF*)

Tax on column 1 (CHF)

Percentage on excess (%)

Over

Not over

0

14,500

-

-

14,500

31,600

-

0.77

31,600

41,400

131.65

0.88

41,400

55,200

217.90

2.64

55,200

72,500

582.20

2.97

72,500

78,100

1,096.00

5.94

78,100

103,600

1,428.60

6.60

103,600

134,600

3,111.60

8.80

134,600

176,000

5,839.60

11.00

176,000

755,200

10,393.60

13.20

755,200

86,848.00

11.50

* Swiss francs

For taxable income above CHF 755,200 the overall tax rate will be 11.5%.

II - Married taxpayers and single taxpayers with minor children

Taxable income (CHF)

Tax on column 1(CHF)

Percentage on excess (%)

Over

Not over

0

28,300

-

-

28,300

50,900

-

1

50,900

58,400

226

2

58,400

75,300

376

3

75,300

90,300

883

4

90,300

103,400

1,483

5

103,400

114,700

2,138

6

114,700

124,200

2,816

7

124,200

131,700

3,481

8

131,700

137,300

4,081

9

137,300

141,200

4,585

10

141,200

143,100

4,975

11

143,100

145,000

5,184

12

145,000

895,900

5,412

13

895,900

103,040

11.5

For taxable income above CHF 895,900 the overall tax rate will be 11.5%.

Zurich cantonal tax (basic tax)

III - Single taxpayers (income taxes)

Taxable income (CHF)

Basic tax on column 1 (CHF)

Percentage on excess (%)

Over

Not over

0

6,700

-

0

6,700

11,400

-

2

11,400

16,100

94

3

16,100

23,700

235

4

23,700

33,000

539

5

33,000

43,700

1,004

6

43,700

56,100

1,646

7

56,100

73,000

2,514

8

73,000

105,500

3,866

9

105,500

137,700

6,791

10

137,700

188,700

10,011

11

188,700

254,900

15,621

12

254,900

23,565

13

IV - Married taxpayers and single taxpayers with minor children (income taxes)

Taxable income (CHF)

Basic tax on column 1 (CHF)

Percentage on excess (%)

Over

Not over

0

13,500

-

0

13,500

19,600

-

2

19,600

27,300

122

3

27,300

36,700

353

4

36,700

47,400

729

5

47,400

61,300

1,264

6

61,300

92,100

2,098

7

92,100

122,900

4,254

8

122,900

169,300

6,718

9

169,300

224,700

10,894

10

224,700

284,800

16,434

11

284,800

354,100

23,045

12

354,100

31,361

13

V - Calculation of effective taxes

For Zurich cantonal taxes, the above rates can be applied directly. For the additional municipal taxes, the above rate has to be multiplied by the respective municipal tax factor, which varies between 0.75 and 1.34 (City of Zurich: 1.19). For church tax the basic tax above is multiplied by the church tax factor, which is between 0.06 and 0.15.

Geneva cantonal tax (basic tax)

The Geneva tax table is quite complex as it does not apply a tax bracket system. The tax rates are increasing continuously in small increments with each increase in income. The table below therefore only provides a general overview.

Taxable income (CHF)

Tax Rate (%)

From

To

0

17,663

0.00

17,664

21,281

8.00

21,282

23,409

9.00

23,410

25,537

10.00

25,538

27,665

11.00

27,666

32,985

12.00

32,986

37,241

13.00

37,242

41,498

14.00

41,499

45,754

14.50

45,755

73,420

15.00

73,421

120,238

15.50

120,239

161,736

16.00

161,737

183,017

16.50

183,018

261,757

17.00

261,758

278,782

17.50

278,783

392,636

18.00

392,637

615,022

18.50

More than 615,022

19.00

The tax rate applicable to a married couple or individuals in a Swiss registered partnership is the rate applicable to 50% of their combined income (so-called 'splitting'). The tax rate applicable to single, widowed, divorced, or separated individuals living with a dependant (child or adult) is the rate applicable to 50% of the income.

The above tax rates are basically applicable to taxpayers filing a tax return. Effective cantonal income and wealth tax is determined by multiplying the basic tax by the multiplier applicable for the tax (calendar) year in question, and then by adding the supplementary tax on wealth.

Local income taxes

Geneva communal tax

Each commune of the canton of Geneva determines the multiplier applied on the cantonal tax rate and hence its communal tax rate autonomously depending on its financial needs. As result, the communal taxes can vary significantly. The communal taxes are, as mentioned above, a percentage of the cantonal taxes, and are levied in conjunction with the cantonal taxes. For example, the effective communal tax of the city of Geneva is 45.5% of basic cantonal tax. The highest communal tax rate is 51% of the basic cantonal tax and is levied in the communes of Chancy and Avully. On the contrary, the lowest communal tax rate is applicable in the communes of Genthod (25%), Cologny (29%), and Vandoeuvres (31%).

Withholding requirements for sales of property, dividends, interest and royalties

In general, interest and dividend income derived from Swiss sources is subject to a 35% withholding tax (WHT), which tax has to be withheld from the paying party (e.g. bank or Swiss company) and is directly deducted from the gross amount paid to the recipient. Based on the facts and circumstances, this tax may be credited towards the overall income tax liability in Switzerland or may be refunded.

On payments received for loans secured by a property located in Switzerland (without repayment amounts, e.g. mainly mortgage interest) a tax at source may be due if the creditor (individual or legal entity) is domiciled abroad. Tax at source has to be withheld by the payer of the interest. Applicable DTTs may cap or abolish the applicable cantonal tax rates.